Margin traders boost Tokyo FX volume in 2010-survey

By IBT Staff Reporter On 07/26/10 AT 3:52 AM

Daily foreign exchange trading volume in Tokyo rose 15.7 percent this year from a year earlier, thanks to the rising popularity of FX margin trading among Japanese individual investors, a survey by a banking industry group showed on Monday.

Foreign currency transactions at 20 major banks in Tokyo, including both Japanese and foreign institutions, amounted to $294.1 billion per day on average in April 2010, compared to $254.2 billion in April a year earlier, said the Tokyo Foreign Exchange Market Committee, a group of forex market players.The figures include trading in spot, swaps, forwards and options.

Volume slumped in 2009 from 2008 as banks cut back on trading after the global credit crisis and has yet to recover to its 2008 level, when there was average daily turnover of $302.5 billion.

Still, increasing flows from Japanese margin traders boosted bank trading with customers to a record high of $69.3 billion per day on average, up 42.9 percent from $48.5 billion in 2009, helping to lift overall trade.

We think the growth reflected an increase in margin trading, Akira Hoshino, chair of the Committee, told reporters.

In terms of currency pairs, the dollar/yen JPY= remained the most heavily traded, with daily average turnover of $184.0 billion, or more than 60 percent of the entire market. The volume was up 16.4 percent from a year earlier.

That was followed by euro/dollar EUR= at $27.1 billion, which climbed 13.3 percent annually.

The euro/yen EURJPY=R came third with $25.7 billion, increasing 52.8 percent from a year earlier. (Reporting by Hideyuki Sano; Editing by Joseph Radford)